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Construction Stocks' Q4 Earnings on Feb 1: USG, MTH and MDC
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The Q4 earnings season has so far seen quarterly releases from 46.2% of the construction companies in the S&P 500 cohort. According to the latest Earnings Preview report, 83.3% of the companies have surpassed earnings as well as revenue expectations. Total earnings at these construction companies increased 13.8% on 13.4% higher revenues.
As the U.S. homebuilding market staged a striking comeback in Dec 2016, it is likely that the housing market may have contributed to economic growth in the fourth quarter. Positives like a healthier economy, improving employment levels, positive consumer confidence and a tight supply situation raise optimism about the sector’s performance in 2017.
So far, some of the leading companies in the construction sector have reported their Q4 results. PulteGroup Inc.’s (PHM - Free Report) fourth-quarter 2016 adjusted earnings beat the Zacks Consensus Estimate by 15.5% while total revenue of $2.49 billion surpassed the mark by 6.9%. D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the first quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 17% and 6.8%, respectively. KB Home (KBH - Free Report) reported fourth-quarter numbers wherein earnings surpassed analysts’ expectations by 8.1% and revenues by 2%.
Let us take a look at how these three construction companies are placed ahead of their fourth-quarter 2016 earnings release on Feb 1.
USG Corporation (USG - Free Report) , a leading manufacturer and distributor of building materials, is scheduled to report before the opening bell.
Last quarter, the company posted a positive earnings surprise of 2.2%. The company surpassed estimates in three of the past four quarters and has an average positive surprise of 24.3%.
Currently, the company has a Zacks Rank #3 (Hold) and an Earnings ESP of -5.56% as the Most Accurate estimate stands at 34 cents while the consensus estimate is pegged higher at 36 cents.
Per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings.
Thus, we caution investors against the stock going into the earnings announcement as the combination of an Earnings ESP of -5.56% and a Zacks Rank #3 lower the possibility of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 36 cents, down 15.3% year over year. Meanwhile, the consensus estimate for revenues is $732.7 million, reflecting a 20.8% decrease.
Meritage Corporation (MTH - Free Report) , one of the nation's largest single-family homebuilders, is slated to report before the market opens.
Last quarter, Meritage surpassed earnings estimates by 2.3%. The company has surpassed estimates in all of the past four quarters, with an average beat of 10.2%.
Meritage has a Zacks Rank #4 (Sell) and an Earnings ESP of +3.36%. Please note that we caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.19, down 5.3% year over year. The consensus for revenues is at $904.0 million, implying 15.6% year-over-year growth.
In the preceding quarter, the company posted a negative earnings surprise of 15%. For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 68 cents, reflecting growth of 55.8% year over year, while the consensus for revenues is at $679.6 million, indicating a 17% year-over-year increase.
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Construction Stocks' Q4 Earnings on Feb 1: USG, MTH and MDC
The Q4 earnings season has so far seen quarterly releases from 46.2% of the construction companies in the S&P 500 cohort. According to the latest Earnings Preview report, 83.3% of the companies have surpassed earnings as well as revenue expectations. Total earnings at these construction companies increased 13.8% on 13.4% higher revenues.
As the U.S. homebuilding market staged a striking comeback in Dec 2016, it is likely that the housing market may have contributed to economic growth in the fourth quarter. Positives like a healthier economy, improving employment levels, positive consumer confidence and a tight supply situation raise optimism about the sector’s performance in 2017.
So far, some of the leading companies in the construction sector have reported their Q4 results. PulteGroup Inc.’s (PHM - Free Report) fourth-quarter 2016 adjusted earnings beat the Zacks Consensus Estimate by 15.5% while total revenue of $2.49 billion surpassed the mark by 6.9%. D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the first quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 17% and 6.8%, respectively. KB Home (KBH - Free Report) reported fourth-quarter numbers wherein earnings surpassed analysts’ expectations by 8.1% and revenues by 2%.
Let us take a look at how these three construction companies are placed ahead of their fourth-quarter 2016 earnings release on Feb 1.
USG Corporation (USG - Free Report) , a leading manufacturer and distributor of building materials, is scheduled to report before the opening bell.
Last quarter, the company posted a positive earnings surprise of 2.2%. The company surpassed estimates in three of the past four quarters and has an average positive surprise of 24.3%.
Currently, the company has a Zacks Rank #3 (Hold) and an Earnings ESP of -5.56% as the Most Accurate estimate stands at 34 cents while the consensus estimate is pegged higher at 36 cents.
Per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings.
Thus, we caution investors against the stock going into the earnings announcement as the combination of an Earnings ESP of -5.56% and a Zacks Rank #3 lower the possibility of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 36 cents, down 15.3% year over year. Meanwhile, the consensus estimate for revenues is $732.7 million, reflecting a 20.8% decrease.
USG Corporation Price and EPS Surprise
USG Corporation Price and EPS Surprise | USG Corporation Quote
Meritage Corporation (MTH - Free Report) , one of the nation's largest single-family homebuilders, is slated to report before the market opens.
Last quarter, Meritage surpassed earnings estimates by 2.3%. The company has surpassed estimates in all of the past four quarters, with an average beat of 10.2%.
Meritage has a Zacks Rank #4 (Sell) and an Earnings ESP of +3.36%. Please note that we caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.19, down 5.3% year over year. The consensus for revenues is at $904.0 million, implying 15.6% year-over-year growth.
Meritage Corporation Price and EPS Surprise
Meritage Corporation Price and EPS Surprise | Meritage Corporation Quote
M.D.C. Holdings, Inc. is engaged in the construction, sale and related financing of residential housing.
Our proven model shows that M.D.C. Holdings is likely to beat earnings because it has the perfect combination of an Earnings ESP of +8.82% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the preceding quarter, the company posted a negative earnings surprise of 15%. For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 68 cents, reflecting growth of 55.8% year over year, while the consensus for revenues is at $679.6 million, indicating a 17% year-over-year increase.
M.D.C. Holdings, Inc. Price and EPS Surprise
M.D.C. Holdings, Inc. Price and EPS Surprise | M.D.C. Holdings, Inc. Quote
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>